US factory activity jumped to a two-year high in July and first-time applications for jobless benefits hit a five and a half year low last week.
The figures bolstered views that US economic growth would accelerate in the second half of the year.
The burst of strength in the economy as the third quarter started keeps on track expectations the Federal Reserve will start reducing its monetary stimulus later this year.
The Institute for Supply Management (ISM) said its index of national factory activity increased to 55.4 last month from 50.9 in June, buoyed by a surge in new orders and production.
A reading above 50 indicates expansion in the sector, which hit a soft patch in the spring.
The pick-up in activity at the nation's factories was also corroborated by financial data firm Markit, which said its US manufacturing Purchasing Managers Index rose to a four-month high in its final July reading. Both surveys showed a rise in factory jobs.
Separately, the Labor Department said initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 326,000 last week, the lowest level since January 2008.
While claims are extremely volatile in July because of summer car plant shutdowns, economists who had expected new filings to rise to 345,000 last week said the general tone of the report was consistent with a pick-up in job gains.
The four-week moving average for new claims, which irons out week-to-week volatility, fell 4,500 to 341,250.
Car makers traditionally close assembly plants for retooling in July, but they have either shortened the shutdown period or completely forgone the closures, throwing off the model that the government uses to adjust the data for seasonal variations.
Last week's claims data has no bearing on tomorrow's employment report for July. The government's closely monitored report is expected to show nonfarm payrolls increased 184,000 last month after rising 195,000 in June, according to a Reuters survey of economists.
The jobless rate is seen ticking down a tenth of percentage point to 7.5%.
There is a risk payrolls could surprise on the upside after a report on Wednesday showed private employers maintained a higher pace of hiring in July. Job gains in the second quarter averaged 196,300 per month.
In another report consultants Challenger, Gray & Christmas said planned layoffs at US firms fell 4.2% in July.
The factory data and steadily improving labour market conditions suggested the economy got off to a good start in the third quarter. Gross domestic product growth increased at a 1.7% annual rate in the second quarter from a pedestrian 1.1% pace in the first three months of the year.
While the Fed last night offered no indication it planned to reduce its monthly $85 billion in bond purchases at its next meeting in September, economists said its silence on that issue was aimed at keeping market-set interest rates tamped down.
Meanwhile, a fifth report from the Commerce Department showed an unexpected drop in construction spending in June. Economists were little concerned about the decline, noting that May and April's construction outlays had been revised higher. Construction spending dropped 0.6% to an annual rate of $884 billion, the figures showed.
